Living Paycheck to Paycheck

For far too many Americans, the high cost of living prevents them from accumulating savings that would allow them to buy a new car, home, or perhaps invest in a new business. Instead, monthly expenses like rent checks, telephone bills, car insurance and groceries take up all their money. In fact, money is so tight for some that when they need to pay their taxes or cover medical bills, they simply can’t do it.

Living without a financial safety net is not uncommon, but there are ways to make sure there are enough funds to meet your needs. Specialized short-term loan companies make it possible for people who live paycheck to paycheck to cover emergency expenses. These companies lend small loans to employed people, as long as the borrower can pay back the loan plus a service charge at the next payday.

The loans are usually less than $500, with the service charge costing somewhere around $15 per $100 borrowed. These services can be found online as well as at payday loan shops across the country. They were once used predominantly by people with poor credit. However, these loans are gaining in popularity in the middle class as more people find themselves in tough financial situations.

Even people who make a higher-than-average salary occasionally need to use such services. In metropolitan areas where rents are high and other expenses such as parking and public transportation can eat through a paycheck quickly, extra cash may be necessary for unforeseen expenses. Rather than charging up a high balance on credit cards with unfavorable rates, a smart financial decision may entail borrowing against your next paycheck. Used wisely, payday loans make it possible to keep your finances in good order.